By Nishel Fernando
 

The Securities and Exchange Commission (SEC) has undertaken enforcement actions against market misconduct involving some high-profile investors and an investment advisor. 
The capital market regulator on its website recently published the enforcement actions taken against market misconduct such as insider dealing and market manipulation. 

Accordingly, SEC revealed action taken against high-net-worth investor Nimal Perera on account of creating a false market or misleading appearance of active trading in the shares of Regnis Lanka PLC (REG) and ASCOT Holdings PLC 11 years ago. 
SEC said upon a request filed by Perera, the Commission decided to compound him, without an admission of liability for the offences with a payment of Rs.3.3 million on each count to the Compensation Fund of the SEC.

Meanwhile, SEC issued a letter of warning on September 2, 2022 to Cargills (Ceylon) PLC Deputy Chairman/CEO V.R Page under insider dealing category.
“The SEC issued a letter of warning for the conduct that created an appearance of insider trading into the trading activity in the voting shares of Cargills (Ceylon) PLC, prior to a dividend announcement,” the SEC noted.

Further, SEC issued a warning letter to Buddhika Payou on August 17 for a conduct related to suspected price/market manipulation in the shares of On’ally Holdings PLC (ONAL) during the period June/July of 2011 in the capacity of an investment advisor.

Also, SEC issued letters of warning on 11th of January this year to A. S. Hendavitharana, Dr. N. A. Senadeera,  P.H.K. Boteju, I. P. A. Piyatissa, W. M. N. P. Rathnayaka, A.J.M.Y.B. Serasinghe,  K.A.D.A. Meththasena, H.J.M.D.N. Bandara and  W.R. Dharmasena for their alleged involvement in contributing to the creation of an appearance of false market by their purchase of one share each in the shares of Browns Investments PLC (BIL) during the period 01st December 2020– 15th January 2021.
The SEC also said it pursued enforcement actions against K. Boralessa, A. Medonza and J. M. Alles for their failure to make immediate disclosure of material information relating to the financial crisis faced by Magpek Exports Ltd.

However, the SEC is yet to disclose information regarding any convictions. According to SEC’s publication policy, it can indefinitely withhold details on convictions from the public.
President Ranil Wickremesinghe recently raised concerns on the country’s stock market highlighting alleged market manipulations that take place at the Colombo Stock Exchange.
The new SEC Act has given wide range of powers to the SEC to act against market offences by modernising the legal framework.